Why Value-Based Payment Reform Is Needed in Children's Healthcare

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Value-based payment reform provides an opportunity for increased resources and improved short- and long-term health outcomes for children, wrote experts in a JAMA Pediatrics Viewpoint article.

Children’s healthcare professionals should engage in value-based payment reform because it leads to the opportunity for children’s health providers to make the case for the value of high-quality children’s healthcare, according to experts in a Viewpoint article in JAMA Pediatrics.

The authors explained that moving toward value-based payment methods may lead to increased resources and added that payment models are designed to improve children’s short- and long-term health outcomes.

“Value-based payment reform refers to changing payments to support care that achieves improved health and experience outcomes at lowered costs. Such payment reforms have broad political support, with growing adoption of these changes in adult health care,” the authors wrote. “However, these reforms are diffusing unevenly into children’s healthcare and are heavily influenced by Medicaid policy.”


The article explained the need for payment models to prioritize and support successful development. Furthermore, because children depend on their caregivers, payment reforms should address the effects of the family unit.

The authors discuss the Alternative Payment Model (APM) Framework developed by the Health Care Payment Learning and Action Network that organizes, tracks, and evaluates progress toward payment reform.

Examples of payment models for children’s healthcare within each category were presented:

  • Category 1: Fee-for-service (FFS) is a predominant payment method that does not effectively support many child healthcare services.
  • Category 2: FFS is the underlying structure but the authors provide examples linking FFS to quality and value including payments for infrastructure development or rewards for performing well on quality measures.
  • Categories 3 and 4: APMs that introduce a payment component based on accountability for patients and populations. This allows more flexibility to shift to care models that are difficult to sustain under FFS models.

“Children’s healthcare providers can drive accelerations in innovative value-based payment models for children’s health,” the authors wrote. “More attention to developing, monitoring, and evaluating which child-specific payment models work, particularly among the most vulnerable youth, is needed.”

The authors explained that value-based payment reform will help the United States to address areas of child and adolescent health, such as the current threats of the childhood obesity and substance use epidemics, that the country is falling short in when compared with other industrialized nations.

“These data will facilitate payment approaches and care models that increase the quality, cost effectiveness, and child centeredness of care, with clear goals and demonstrated effects that hold potential for much-needed increased overall financial support for child health,” the authors concluded.


Wong CA, Perrin JM, McClellan M. Making the case for value-based payment reform in children’s health care. [published online April 9, 2018]. JAMA Pediatr. doi:10.1001/jamapediatrics.2018.0129.